This document is a Consent Agreement authorized by Title 10 M.R.S.A.
§ 8003(5), entered into among Steven B. Cobb, a resident of Maine;
the Maine Bureau of Insurance; and the Maine Office of the Attorney
General. Its purpose is to resolve, in lieu of an adjudicatory proceeding,
issues implicating Title 24-A M.R.S.A. §1417(1) and §1420-K(1)(H).

STATEMENT
OF FACTS

The Superintendent of Insurance is the official charged with administering
and enforcing Maine’s insurance laws and regulations, and the
Bureau of Insurance is the administrative agency with such jurisdiction.

Steven B. Cobb has been licensed in Maine as a resident insurance
producer with Life and Health authority since April 25, 2003, and
with Property and Casualty authority since October 21, 2004. His Maine
Producer Number is PRR 94525. His National Producer Number is 7668625.

In February, 2006, Mr. Cobb submitted an application for homeowners’
insurance as an appointed agent for the insurer, on behalf of consumers
J.K. and T.K., residents of Livermore, Maine. This arose out of a
consultation between Mr. Cobb and T.K. concerning an automobile insurance
quote, in the course of which Mr. Cobb indicated that a multiple line
premium discount would be available in response to T.K.’s question
on that point.

Mr. Cobb inspected the premises in connection with the homeowners’
application pursuant to company underwriting guidelines.

In connection with J.K.’s licensed daycare business at the
premises, Mr. Cobb indicated on the application that eight (8) children
were cared for.

The binder form issued in connection with this application stated
that the company “will provide coverage to the applicant and
his or her legal representative on the property described for up to
ninety (90) days from the Effective Date, subject to the terms and
conditions of the policy and endorsements for which application has
been made.” Mr. Cobb did not otherwise specifically advise the
applicants that under Maine law (24-A M.R.S.A. §3049), by switching
their homeowners’ coverage from their previous insurer to Mr.
Cobb’s insurer, J.K. and T.K. would be subject to a 90 day underwriting
period during which the new insurer could cancel or decline their
coverage without adherence to the statutory grounds that would otherwise
apply under the Maine Property Insurance Cancellation Control Act,
24-A M.R.S.A. §§3048 – 3059.

Mr. Cobb submitted the application on behalf of J.K. and T.K.

In connection with this transaction through which J.K. and T.K.secured
coverage through Mr. Cobb’s carrier, they ceased to be insured
through their previous homeowner’s carrier.

This company’s underwriting guidelines allow for a maximum
of six (6) unrelated children to be cared for in a daycare.

J.K. and T.K. later received a Cancellation Notice from the insurer
with a cancellation date of May 8, 2006, and stating in pertinent
part:

“Thank you for the opportunity to consider your application
for insurance. After a careful review, we regret that we cannot
issue the policy as requested. The coverage provided by this application
will terminate on the CANCELLATION DATE stated above.

This insurance coverage is not acceptable to [company] because
of increased liability due to the number of unrelated children in
your care – we only provide coverage for child care operations
with a maximum of six children cared for at any one time....”

The notice also referred to an undisclosed prior lightning loss
of $650.00 as to which Mr. Cobb and the insureds differ regarding
the alleged nondisclosure, but which is otherwise not directly relevant
to the specific subject of this consent agreement, which concerns
the company’s daycare underwriting guidelines.

J.K. and T.K. complained to the Bureau of Insurance.

In response to an inquiry from Bureau consumer complaint staff in
connection with the complaint, the company indicated that the declination
was processed within the 90-day underwriting period referred to in
Paragraph 6 above, and also stated in pertinent part:

“The application for homeowner’s coverage indicates
a day care operation is being conducted on the residence premises
for eight children. The maximum number of unrelated children permitted
under [company’s] child care endorsement is six. The agent’s
office is indicating they submitted the application without informing
the applicant of any of these limitations.”

Mr. Cobb’s written reply, received August 14, 2006, differed
from certain statements of J.K. and T.K. regarding some of the factual
matters relating to their application including the actual number
of children cared for in J.K.’s case, but acknowledged that
company guidelines require no more than six unrelated children in
a daycare. Mr. Cobb asserted that J.K. cared for six unrelated children
and two of her own, but acknowledged that he simply entered “eight”
on the application in response to the item requesting the number of
children cared for. Further, as this company’s application did
not require a personal signature from the applicants, they did not
see the completed application before its submission to the company.

CONCLUSIONS
OF LAW

Under 24-A M.R.S.A. §1417 and §1420-K(1)(H), after notice
and opportunity for hearing, the Superintendent may place on probation,
suspend, revoke or refuse to issue or renew an insurance producer's
license or may levy a civil penalty in accordance with section 12-A,
or take any combination of such actions, for using fraudulent, coercive
or dishonest practices, or demonstrating incompetence, untrustworthiness
or financial irresponsibility in the conduct of business in this State
or elsewhere.

Mr. Cobb submitted an application which indicated more children
cared for in J.K.’s daycare than allowed for in the underwriting
guidelines of the company which he represented. He also did not advise
the applicants of the 90 day underwriting period during which the
company could decline coverage under the Maine Property Cancellation
Control Act without adhering to the specific statutory grounds that
would otherwise apply under that Act. The insureds’ homeowners’
coverage was in fact subsequently cancelled, and they were forced
to seek coverage in the surplus lines market.

Mr. Cobb’s submission of an application which did not comply
with company underwriting guidelines, and his failure to advise the
applicants of their risk of declination or cancellation demonstrated
incompetence in the conduct of business in Maine, which constitutes
grounds for action against his license in accordance with 24-A M.R.S.A.
§1420-K(1)(H).

COVENANTS

Steven B. Cobb, the Maine Bureau of Insurance, and the Maine Office
of the Attorney General agree to the following.

This Consent Agreement is entered into in accordance with 10 M.R.S.A.
§ 8003(5)(B) and is not subject to review or appeal. This Consent
Agreement is enforceable by an action in the Superior Court.

At the time of executing this Consent Agreement, Mr. Cobb will remit
to the Maine Bureau of Insurance a civil penalty in the amount of
$225.00, payable to the Treasurer of the State of Maine.

In the conduct of his business as a licensed Maine producer, Mr.
Cobb will specifically disclose company underwriting guidelines concerning
the maximum number of persons allowed for daycares to any applicants
for homeowners’ insurance in all situations when he is on notice
that the applicant operates a daycare in his or her home. For a period
of two years from the date of this consent agreement, and before submitting
any such applications to the company, Mr. Cobb must obtain from all
such applicants a written and signed statement concerning their compliance
with the guidelines regarding the number of persons cared for in a
daycare, through use of a document substantially in the form of Exhibit
A attached.

In all future cases where Mr. Cobb deals with applicants for property
insurance coverage who have already been insured for more than 90
days through another company, Mr. Cobb will advise such applicants
of the 90 day underwriting period provided for in the Maine Property
Cancellation Control Act. For a period of two years from the date
of this consent agreement and before submitting any such application
to the company, Mr. Cobb must obtain any such applicant’s signed
acknowledgement that Mr. Cobb has made such disclosure, through use
of a document substantially in the form of Exhibit B attached.

For a period of two years from the date of this consent agreement,
in addition to all other applicable recordkeeping requirements, including
those required of producers generally at 24-A M.R.S.A. §1447,
Mr. Cobb will be subject to random audits by the Bureau of Insurance
of all records pertaining to his producer activity, specifically including
the written acknowledgements required under Paragraphs 21 and 22.
He will make such records available to the Superintendent at his place
of business at any time during normal business hours, and will promptly
comply with any requests to produce such records at the offices of
the Bureau of Insurance.

Mr. Cobb understands and acknowledges that this Agreement will constitute
a public record within the meaning of 1 MRSA § 402, and will
be available for public inspection and copying as provided for by
1 MRSA § 408, and will be reported to the NAIC “RIRS”
database.

The licensee, the Superintendent of Insurance, Bureau of Insurance,
and Office of the Attorney General agree that no further administrative
or legal action shall be initiated based on the facts contained in
this Consent Agreement, except in the event that the licensee fails
to comply with the terms of this Consent Agreement. In the event of
a violation of this Agreement the licensee may be subject to any available
legal remedy for the violation, including without limitation the further
suspension or revocation of all licenses issued under the Maine Insurance
Code.

Nothing in this Agreement shall affect the rights or interests of
any person who is not a party to this Agreement, nor does it resolve
any issues pertaining to any other facts other than those recited
herein.

Mr. Steven B. Cobb acknowledges by his signature hereto that he
has read this Consent Agreement, that he has had an opportunity to
consult with an attorney before executing this Consent Agreement,
that he executed this Consent Agreement of his own free will and that
he agrees to abide by all terms and conditions set forth herein.

Steven B. Cobb

Dated:______________, _____

___________________________

Steven B. Cobb

State of Maine, _______________, ss

Subscribed and Sworn to before me

_______________________________

this _______ day of _______, _____.

Notary Public

___________________________

(printed name)

THE MAINE
SUPERINTENDENT OF INSURANCE

Dated: 1/24/2007

____________________________

Eric A. Cioppa, Acting Superintendent

FOR THE
OFFICE OF THE ATTORNEY GENERAL

Dated: ________________,_____

____________________________

Assistant Attorney General

___________________________

(printed name)

Exhibit A

DISCLOSURE FORM

DAYCARE UNDERWRITING GUIDELINES
CONCERNING NUMBER OF PERSONS CARED FOR

The undersigned applicant for homeowner’s insurance acknowledges
that the licensed insurance producer indicated below has disclosed that
the company’s underwriting standard pertaining to the maximum
number of persons cared for in a daycare in the applicant’s home
is as follows:

The applicant further confirms that the maximum number of persons cared
for in the applicant’s daycare is _____________________.

Dated:________________

____________________________

Applicant’s signature

___________________________

Applicant’s printed name

Dated:________________

____________________________

Producer’s signature

___________________________

Producer’s printed name

Exhibit B

DISCLOSURE FORM

90 DAY NEW INSURED UNDERWRITING PERIOD

The undersigned applicant for homeowner’s insurance acknowledges
that the licensed insurance producer indicated below has disclosed that
under the Maine Insurance Code’s “Maine Property Cancellation
Control Act,” found in Maine statutes at 24-A M.R.S.A. §3049,
the specific limitations of the grounds upon which an insurer may cancel
a policy do not apply to any policy or coverage that has been in effect
less than 90 days, and an insured does not have the right to a hearing
before the Superintendent of Insurance for the purpose of contesting
cancellation of a new policy that has been in force less than 90 days